The House resumed from April 3 consideration of the motion that Bill S-3, an act to amend the Pension Benefits Standards Act, 1985 and the Office of the Superintendent of Financial Institutions Act, be read the second time and referred to a committee.

Mr. Speaker, I shall be brief, as this is essentially a housekeeping bill.

Bill S-3 amends the Pension Benefits Standards Act, 1985 and the Office of the Superintendent of Financial Institutions Act, enhancing the powers of the superintendent to supervise the management of private pension plans.

My party will save its questions and in-depth consideration of certain provisions of the bill for the Standing Committee on Finance. We have a number of concerns about this bill, particularly with clauses like clause 6(3), which provides that pension plan administrators are not liable if they relied in good faith on “financial statements of the pension plan prepared by an accountant”—the type of accountant is not specified—“or a report of an accountant, an actuary, a lawyer, a notary or another professional person whose profession lends credibility to the report”.

There are some very interesting questions for departmental officials.

We also have some reservations about clause 9.2 and intend to clarify the scope of this clause when it is studied in committee. Clause 9.2(8) provides that the arbitrator shall not be bound when there is a dispute, and I quote:

9.2(8) The arbitrator is not bound by any legal or technical rules of evidence in conducting any matter that comes before the arbitrator—

It would perhaps be better for the rules of law and equity to prevail in cases of disagreement over management of a pension fund.

In clause 9.2(15), it would be interesting to have clear answers. This clause provides that the executive of a union shall represent its members, but not its former members, such as retired individuals. There are questions for officials, such as why this does not apply to retired individuals who used to pay into the pension plan. The Bloc Quebecois prefers to ask all these questions in committee.

Generally, however, I can tell you that this bill improves everything to do with the management of private pension plans and could have prevented certain problems of management and responsibility. If provisions such as these had been available in the past, a number of disputes over private pension plans could have been resolved. I am thinking of Singer employers, among others.

I will conclude by saying that, in the course of its work, the Standing Committee on Finance will try to obtain answers to these questions. With reservations, we are in agreement with the general thrust of this bill.

Mr. Speaker, I also want to say a few words in the debate, not for any longer than my colleague in the Bloc Quebecois.

I want to register a very general complaint. Once again we have a bill here that originates in the unelected Senate. In the name of democracy I do not think that is a very wise practice and I do not think it is a practice that would be supported by the overwhelming majority of the Canadian people.

There are many dedicated individuals in the Senate but the fact remains that it is a non-democratic house, a non-democratic legislative body. Over the years going back in the history of the CCF and NDP and more recently joined by the Reform Party, they objected to this kind of practice in the House of Commons where a bill that should originate in the House of Commons originates in the other place, in the Senate of Canada.

The bill before the House today is an administrative bill and a highly technical bill. The main debate on the bill should be done before the committee at the committee stage.

Bill S-3 is an act to amend the Pension Benefits Standards Act, 1985 and also the Office of the Superintendent of Financial Institutions Act. The bill was first introduced under a different name. It was called Bill C-85 in the last parliament and it was introduced in March of 1997. When the writs dropped for the election on April 27, 1997 all legislation at that time ceased to exist as the Parliament of Canada was dissolved.

This bill has been reintroduced and was passed by the Senate on November 20, 1997 and here it is now in the House of Commons.

The bill covers a number of things. First of all, it governs private pension plans set up for employees working in businesses under federal jurisdiction. I think of the interprovincial transportation companies and telecommunication companies. I also think of the Canadian chartered banks and any other institutions under federal jurisdiction.

It does not cover MP pensions or pensions of federal public servants. It covers only private sector pension plans of companies under the jurisdiction of the federal government.

Bill S-3 would also introduce to the Pension Benefits Standards Act the same philosophy that governs the changes to legislation governing federal chartered financial institutions in Canada. That of course is of interest now with the talk regarding the merging of big Canadian banks.

The second part of the bill would deal with the office of the superintendent of financial institutions. It would basically enhance the powers of this office to supervise a pension plan in this country.

There are a number of details in the bill in general that can summarize it. It seeks to clarify ground rules for housekeeping and codify the rules of how to handle controversial issue of the treatment of surplus assets on pension plans. It restores a better balance between the employer and those who benefit from the plan. It enhances the ability of the minister to enter into agreements with provinces to apply and enforce provinces' pension legislation. It sets a prudent person approach as long as the definition of a prudent person remains broadly based. That is really the general purpose of the bill, very administrative and very technical.

I want to at this time without going into detail, flag a number of concerns we have in the New Democratic Party of Canada. Regulations can be drafted by order in council that would unnecessarily pass the parliamentary process. In other words, we are handing too much power to the bureaucrats, a few unelected officials, to draft legislation that is never scrutinized by the House of Commons or by the appropriate parliamentary committee. That is a major concern for us. All too often as parliamentarians we cede too much of our power and authority as law makers of the land to bureaucrats who, despite their good intentions, draft regulations that are accountable to no one. Even the minister and her office would be at a loss to explain the regulations. It could change the whole intent of the bill. We have seen that happen many times in the past.

We are concerned about the solvency ratio in the bill. The solvency ratio is much too high. That is something we should get into at the committee stage.

We are concerned about a number of other things. There is the question of a surplus withdrawal. The whole process seems to be very sloppy and incoherent.

Those are some of our concerns. We look forward to pursuing this bill in committee. Unless the parliamentary secretary and the assistant whip can elaborate on the details of the bill, we will pursue this at the committee stage.

Mr. Speaker, I rise on a point of order. Discussions have taken place between the parties. I believe you will find consent for the following motion:

That, if a recorded division is requested later this day on second reading of Bill S-3, the said division shall be deemed deferred until Tuesday, April 28, 1998 at the end of the time provided for Government Orders.

Mr. Speaker, I rise today to try to persuade all members present that we should give careful consideration to what we are doing here today. I could say I am standing here as part of the body of sober second thought. Usually that terminology is applied to the Senate but since the bill started in the Senate and has already been passed by the Senate, its sober second thought has become the first thought, and so here we are giving it sober second thought in this Chamber.

The unelected Senate has done another wonderful thing for us. It has now reversed the roles of the House of Commons and its own august chamber. I object to that. I am sure thousands and maybe millions of Canadians do. It is time we straightened that Senate up.

I might not object if the senators had been elected, if the people would have had a voice to say which one gets in there. Instead the prime minister of the day appoints whoever happens to have the best party credentials. Then that person becomes a senator. The other thing that is so unconscionable about that is that senator never has to go back to the people nor to the prime minister to be accountable. We saw that recently. The prime minister who has the right to appoint senators has no right to right to dis-appoint them. I use that term advisedly. Even the prime minister who appoints them cannot hold them accountable.

There is a large flaw in a democratic system when we break that circle of accountability. In a circle everyone is accountable to the person either in front or behind them. That is what happens in a democracy. As a member of Parliament I am responsible to the people in my riding. In return, those people are responsible to correctly choose and direct their member of Parliament so we get good laws in this country. The citizens are in that circle of responsibility.

It is unfortunate when the prime minister appoints a Senate and the Senate ends up initiating laws like this because the circle of accountability is broken. We should not be surprised when that happens, that we have laws that are not as good as they could be.

I will talk about the amendments to the Pension Benefits Standards Act, the bill we are debating today.

I have a little problem suppressing my cynicism. What we have here is a government that is proposing to strengthen the role of the superintendent of pension administration. The superintendent is the person who oversees the building of pension funds in the public and private sectors across the country.

The federal government is appointing a superintendent to oversee pension funds, presumably providing protection for the pension funds of employees and employers but mostly on behalf of employees.

One needs to ask what kind of credentials the government can display. Since 1966 one of the largest pension funds in the country has been the Canada pension plan. It was started by the Liberals. Right from the beginning as data were gathered and statistical information became available it was underfunded. When the Conservatives were nine years in power they did not correct it. The Liberals have been in power for a number of years. That pension fund has been administered in such a way that its present unfunded liability is currently about equal to our national debt, both of which are shameful.

It is true that the national debt is a little bigger. We have about $580 billion of debt that we owe directly because government was borrowing. However, if one were to do the actuarial mathematical calculation to see what kind of money is now needed to fulfil all future obligations of the Canada pension plan, one would see the amount of shortfall is in the neighbourhood of $500 billion, an astronomical number. Yet the government starts a bill in the Senate that says we need a superintendent of pension funds.

I agree on behalf of employees that we need to have the assurance that when pension funds are contributed by employers and employees they are properly managed and properly invested. An accounting should be done. There should be proper security of those funds so that no one can abscond with the money. In the event that businesses run into hard times there need to be protections against those businesses reaching into their pension funds, which really belong to the employees, to try to bail themselves out. We need those regulations.

I agree but, as I said earlier, part of me has trouble suppressing my cynicism when the same government says that it should supervise pension funds so that everything goes well and it has such a terrible track record with its own pension fund, the Canada pension plan.

In this instance I think right now that I will support the measures being proposed in the bill. Of course I object that the bill did not start up here, but so be it.

Most of the measures in the bill are needed and I want to support it. I have a concern with sections of the act that state the superintendent, under the authority of the minister, has the powers to do these different things.

Some of the powers are very important. Anybody who reads the act will see that the superintendent, for example, has the right to demand that any new pension fund be registered with his office within 60 days. That is a perfectly fine and acceptable requirement.

This is a way of providing some assurance and some security for employees who are paying into the pension fund. It helps everybody involved in administering the fund to be accountable to someone. There we come back to the question of accountability again.

I have some real serious concerns on behalf of people who work all their lives. When they approach retirement age they suddenly find the things they were planning on have evaporated right under their noses.

I know of a family back in my riding where that happened. This man worked hard in a company for many years. He was about four or five years away from retirement age when the company, how do I put it politely, spun into the ground. It dug itself into a hole. The bosses decided they would try to do some interim financing by borrowing from the pension fund, which on the surface seemed okay at that time. It would have been okay if it would have been a temporary loan, if the company would have recovered and put the money back.

In this instance it became impossible for the company to do so. I am not even sure there was anything illegal about what it was doing at the time. I do not know those details. However it took the pension money to try to bail itself out. The company still went under. Now the employees, including the person I know who was five years away from retiring, suddenly lost their jobs because the company quit and their pension fund evaporated with it. Now he is dependent on Canada pension for which he is eligible. It is really a drastic situation when people who pay into these funds for years and years cannot trust them.

I guess the beginning and the end of what I was to say is included in these statements. We need to make sure as legislators that we implement rules and we set up regulations correctly. I am grateful that in the House of Commons we have the scrutiny of regulations committee. When the superintendent, under the authority of the minister, makes regulations that apply to the administration of pension funds, the regulations are subject to the scrutiny of the House committee. Hopefully that will give Canadians a little more security in the assurance that their pensions funds will be there for them.

I have problems with some of the powers being given to the superintendent. In some instances they seem to be arbitrary. I have additional anxiety about a superintendent being responsible only to the minister.

I can make an outrageous statement here and I am sure I will not hear a voice of protest from them. Ministers in the present government do not always answer questions in question period. When we ask a question about something usually we get a runaround. Usually we get some vicious attack on our party, even maybe saying that we are not being very nice to ask such a question instead of giving us the facts.

What we have here is a superintendent who is answerable to the minister, but who can ever force the minister to be answerable to anyone?

I would like to see a real demand for openness in pension funds. Some of that is included in the bill. It begins a process. Perhaps it does not go far enough, but it requires that the superintendent get information.

I would like to make sure that everyone with a vested interest in the pension fund, whether it is an individual employee or someone even more distantly interested in the pension fund because of administrative procedures and so on, should have access to the records and administrative procedures being used in the administration of the pension fund.

I conclude by simply saying that the administration of pension funds is most important. We are living in an age in which many of us live longer. I come from a family where people live terribly long. I do not know whether I will keep up the family tradition but I expect to do so. That is true for many of us.

I remember as a young man at university studying mathematics, statistics, actuarial tables and things like that. Back then the actuarial tables we used had a life expectancy for a Canadian male of around 62 years. Now that dates me because those are very old tables. The life expectancy for males in Canada is approaching 80 years and for females it is even higher.

We now live longer in that period of time in our lives when we usually do not have jobs. We have retired and are depending on our retirement income. It is incumbent on the government to do what it needs to do so that there is openness and accountability. Pension funds need to be well administered. People need to have confidence in them. They need the government to actually deliver the funds that are expected when they retire.

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Charlotte, Health; the hon. member for Sackville—Eastern Shore, The Atlantic Groundfish Strategy; the hon. member for Edmonton East, Merchant navy veterans.

Mr. Speaker, I have two questions for my friend in the Reform Party. I applaud what he said about the bill being introduced in the Senate. I said similar things a few minutes earlier. We therefore certainly agree on that and I would like to elaborate for a minute or so.

This practice started decades and decades ago. Over the last few years it has escalated, which concerns me. When I was first elected in 1968 it was extremely rare that the government would introduce a bill through the Senate. If that were to happen, the Hon. Stanley Knowles would rise in the House and object to it. The practice now is becoming more and more common, which concerns me as a democrat. I am talking about a democrat in a democratic process.

Would the member across the way think that the Senate should be abolished? Do we need that other place, or do we form an elected Senate? The problem with forming an elected Senate, having gone through a constitutional process, is that it is very difficult to come up with a national agreement that would carry in the country. As long as we hold out a dream of electing it and reforming it we might be stuck with the unelected Senate.

I went through the Charlottetown process, the Meech Lake process, the parliamentary committees of the House where there was all party consensus and so on, and the most difficult issue was always the Senate. Triple E sounds very nice in principle, but the province of Quebec is unique and distinct with 25% of the people. The huge province of Ontario has 38% of the people. There are many small provinces. We are a federation with 65% or 70% of our people in two of the ten provinces. Therefore it makes it very difficult to reach an agreement on an equal Senate. Ontario and Quebec do not agree to it because of their size.

If the provinces agree to an equal Senate as suggested in the Charlottetown accord, the powers of that Senate would be diminished. Then what would be the purpose of the Senate? I get back to how we put a round peg in a square hole and ask whether or not the member has some advice for the House.

My other question is on the substance of the bill. I am concerned that the powers of the Office of the Superintendent of Financial Institutions are to be enhanced.

Would the member deal in more detail than he did with the types of powers he thinks will be negative in terms of enhancement and the move away from accountability by the House of Commons of the Office of the Superintendent of Financial Institutions?

The issue is becoming more and more an issue of sensitivity as we are looking at the big bank mergers that are coming down. I know this does not affect banks, but it affects people working in private sector companies across the country that are regulated by federal law and jurisdiction such as our major chartered banks.

I know the member is an expert in this area so I would be interested in hearing him go into detail in terms of the powers he is concerned about being enhanced. I certainly agree with him that we are handing too many powers to that official and that office without the scrutiny of Parliament. This whole process should be democratized. Accountability is extremely important in public life and politics.

On the Senate, how do we put that round peg in a square hole? My second question is with regard to the powers of the office of the superintendent of financial institutions.